Home Buying in Hillcrest>Question Details

Tina, Other/Just Looking in Rubin

My husband and I are looking to invest in a rental property and were thinking about the Hillcrest, University

Asked by Tina, Rubin Mon Aug 11, 2008

Heights area. We are trying to get some preliminary information. 1) In your opinion, are those good areas to invest? 2)Do you think it is better to invest in a house vs. a condo? We have about $200K -$250 to put down and would like to net about $1000 a month in rental income. We would most likely use a property management company. Could we get into those areas with those numbers?

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Max’s answer
I have some good investments for you
Build a new home, 185K for Land, 235K new house, about 420K Total
420K - 225K down = 195K Loan at aprox $1100 per month, rent home for $2000 = $900 per month
Home after it is built is worth about 450K - 500K

Duplex in Lemon Grove,
Purchase price 325K - 225K down = 100K loan at $550 per month
Actual Rental income $2400 - $550 = $1850 Income per month

I am not a RE agent, I do invest in RE,
Option 3, I could help you buy rental property at low prices for a consulting fee
In this current market, with 200K down, I could help you get $6600 - $7200 Gross Income
Down payment at 33% LTV, 400K in Loans, $2200 loan payments,
$4400 to $5000 Income per month
0 votes Thank Flag Link Sun Feb 21, 2010
Dear Tina,

I LOVE your idea. My favorite investment property area in all of San Diego County is University Heights and Normal Heights. I should know, I own rental property there (houses, not condos). I highly recommend you consider the 2/1 bungalow configuration house and not knowing what your budget is, I can say with that down payment in the bank, you may be qualified to purchase two or three of them. I find them to be completely on sale and typically get about $1,650 for a 2/1 in tip top shape. This is right up my alley and a lot of people use me to purchase their investment property because of my first hand and well rounded experience. I can go on and on about this topic, so please call me if you want to talk.

Houses only! Stay away from condos in this area PLEASE.

I am excited for you!
1 vote Thank Flag Link Thu Aug 28, 2008
Hi Tina,

Hillcrest is an excellent area for rental properties for 3 reasons:

1. The area has a high rental occupancy rate
2. It is close to downtown and Mission Valley and attracts high quality renters
3. There are a wide variety of properties that would fit your investor profile.
We have two CAP Rate calculators we could provide for free.

Lastly, we recommend our investor buyers use a Property Management company. The one we refer charges a flat $125/momth and does everything from clean up, painting, repairs, finding the tenants, collecting the rent, etc. They only charge you when the property is occupied.

We recommend do a lot of homework to make sure you understand all of the numbers and the tax implications.

Please let us know if we can be of further assistance.

Best regards,

Mark & Kari Shea
Shea Real Estate & Investment Group
1 vote Thank Flag Link Tue Aug 12, 2008
Hi Tina,
Most people generally feel it is best to buy a single family home vs a condo if there are funds to do so. Your down payment is adequate to get cash flow in a lot of areas. I have buyers who are investing in condos near colleges such as SDSU where you can get a very nice one bedroom for $95k or 2 bedroom condo for about $130k. You could buy 2 with your downpayment! You could have a nice 3 bedroom home in parts of North County for $300,000. Rents of about $1700 per month would pencil out nicely. You could also have condos or a house near Cal State San Marcos. I do property management in North County and the fees quoted below are accurate. You have lots of good choices! Good luck.
1 vote Thank Flag Link Mon Aug 11, 2008
Hello Tina, there are some good values to be found in those areas as well as the downtown where I specialize, and your numbers are doable. Generally property management will run between 7 and 10% of the gross rent, and if you choose a condominium you may consider saving the management fee since the exterior is maintained by the Home Owner Association, however, the money saved there generally is just moved to the HOA fee category. Feel free to search the entire MLS at my team website http://www.WeSell92101.com that covers all of San Diego and you can search by area such as Hillcress and Univerysity Heights or other specific areas if you wish.
1 vote Thank Flag Link Mon Aug 11, 2008
Hi Tina: I have owned a rental condo for 8 years in Hillcrest and it has never been vacant. It was new in 99 and I bought from original owners in 02, they had never lived in it but stored their artwork as they lived next door. I have preferred a condo as it has been less maintenence and no worries with water bill or gardening. Something to consider.( Also, one thing to remember single homes in Hillcrest are old.) I get over 2k a month and have always had quality tenants as the area attracts quality people. I am getting out of the landlord biz as I am downsizing..Just put it on the market for sale now..@430K, its a 2 bed 2.5 bath townhome with an underground gated garage (2 car parking spaces) all appliances stay incl w&d. It's quite lovely.1140 sq.ft. You can not go wrong with Hillcrest for rental props. Managed myself. All you need is a good plumber, electrician etc to call if and when they're needed. Have used management companies before and they did nothing for me. If you'd liked more info MLS#100002836.

Linda Fox Owner/Agent Keller Williams Realty
0 votes Thank Flag Link Thu Feb 4, 2010
That's pretty low expectations for net income for your money. Are you investing in these areas because you are stuck on Hilcrest and University or because you want to be in San Diego and don't know other areas? Even in San Diego, you could get much better income from your cash than that. I owned properties here from Encanto to Poway, to Oceanside, Vista and so on, Hilcrest and University are good areas, but overrated and they offer very low cap rate.

I would wait a little to buy here, especially if you want your property to cash flow. There are plenty of international opportunities with 8-10% cap rates in appreciating markets within 6 hours of flight time from here, i.e. you could be making $800-1000 per month for each 100,000 of downpayment. Contact me, we can discuss it further.

Good luck.
0 votes Thank Flag Link Wed Aug 13, 2008
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